Today: Cisco (CSCO) has its biggest Wall Street fall in more than a year, taking other tech stocks down with it. Plus: Two Silicon Valley companies have strong IPO days, and Microsoft integrates Facebook with Bing in challenge to Google (GOOG).

Cisco’s dreary take on economy hurts stock, other tech firms

Cisco’s concerns about the economy transferred to investors Thursday, as the San Jose networking company’s stock fell the most in 15 months and took other tech stocks down the well with it.

The technology industry bellwether reported earnings in line with analysts’ expectations Wednesday, but offered a forecast that fell well below projections along with dreary thoughts on the current macroeconomic environment for information technology companies.

Analysts said that Cisco has been right about economic slowdowns in the past, and its position as a purveyor of products typically purchased by other tech companies gives it an advantageous position from which to determine the winds of change.

“The frightening message in Cisco’s more cautious tone last night is that the company has a history of uncovering weakening demand trends ahead of competitors, as was the case going into the 2008 financial crisis and the recent downturn in public spending,” Topeka Capital Markets analyst Brian White said in a Thursday morning note.

Investors fearful that Cisco was correct about the future spending environment for tech products brought the company’s shares down 10.5 percent in Thursday trading, when the company’s stock closed at $16.81.

Cisco was not the only one to suffer from its prognostications, however, as other tech equipment makers fell: Cisco rival Juniper, based in Sunnyvale, declined 4.9 percent; Sunnyvale data-management firm NetApp fell 5.5 percent; and enterprise software companies VMware and Oracle (ORCL) fell 3.9 percent and 2.7 percent, respectively.

While investors freaked out at Cisco’s statements, some analysts pointed out that the company should weather the storm it forecasts relatively well, thanks to recent cutbacks Chambers has made at the company to bring down spending.

“We believe (Cisco) is well-positioned to weather a weakening global spending environment given its broad portfolio and actions already taken to restructure the business ahead of its rivals,” Wedbush analyst Rohit Chopra wrote.

Intel (INTC) CEO Paul Otellini, who company’s stock has recently traded near an eight-year high, said the Santa Clara chipmaker does not foresee the same issues as Chambers.

“The enterprise is good, it’s not fantastic, so we don’t see a change in that,” Intel CEO Paul Otellini said Thursday at an event in Santa Clara. “I think John’s comments were focused on Europe in particular. We haven’t seen any change in Europe demand on the enterprise side.”

Wall Street held up overall despite losses in the IT sector, with the Dow Jones industrial average breaking its six-day losing streak with a gain of 0.2 percent, the Standard & Poor’s 500 eking out its second gain in the past seven sessions at 0.3 percent, and the tech-heavy Nasdaq suffering a small fall of 0.04 percent.

Microsoft plans to use its close relationship with Facebook to battle Google in the search sector that the Mountain View company completely dominates.

The Redmond, Wash.-based tech giant announced Thursday that it will feature deeper Facebook integration in its Bing search engine beginning this summer, part of the most drastic changes to its search arm since it was introduced three years ago.

Google has attempted to introduce social-media results to its search results, but has to rely on its own Google+ social network for the results because Facebook and Twitter will not open up their networks to Google. Microsoft, however, owns 1.6 percent of Menlo Park-based Facebook and reportedly has a good relationship with the company, and struck a deal with Twitter for expanded access to the microblogging service’s content in 2009.

“We are not trying to build an empire by favoring some services over others,” Gurry told the Associated Press.

The new Bing will offer three streams of content for every search query, with the far left column representing the same results that users currently receive; the middle column, called “Snapshot,” will offer searchers the option of completing certain tasks that may be related to the search, such as buying movie tickets; and the far right column will display results from social networks the user is logged in to.

“This is a big, bold bet that we think is going to surprise a lot of people,” Gurry said. “It’s a fundamentally different way of looking at search.”

Silicon Valley companies continued to find eager buyers for initial public offerings Thursday, with two more companies raking in millions and then seeing their shares pop even higher on the open market in advance of Facebook’s highly anticipated public debut.

Mountain View-based Audience, which makes processors that improve audio quality in mobile devices such as the iPhone, raked in $89.6 million in its IPO after pricing shares at $17, $1 higher than the previously stated range of $14 to $16. The company, which derived 75 percent of its revenue from Apple (AAPL) in 2011, then saw its shares rise 12.2 percent to $19.08 on the open market.

“Audience is really alone out there within a very good market niche and that’s what has been required in past tech offerings that have really worked well,” Scott Sweet, senior managing partner at IPO research firm IPO Boutique, told Reuters on Wednesday.

San Mateo-based cloud software company WageWorks took the other route with its pricing strategy, selling shares for $1 less than the initial range. After planning to sell 6.5 million shares for $10 to $12 apiece, the company instead sold the shares at $9, bringing in $58.5 million.

WageWorks closed with its highest sale of the day, at $12.60, a 40 percent premium from its IPO price. However, that sale was out of line with most of the WageWorks trades on the day — the stock was selling for less than $11 five minutes before the close and dropped back down to about $11 in after-hours trading.

And the widely watched Standard & Poor’s 500 index: Up 3.41, or 0.25 percent, to 1,357.99.

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.

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